It’s tax time and many Teamsters are finding out they are ineligible for the new federal “No Tax on Overtime” deduction, including Teamsters in airline, rail, trucking and at UPS.  

The “One Big Beautiful Bill” that passed last year promised a tax break on a portion of workers’ overtime earnings. But, for many Teamsters, there is a big catch.

The tax break only applies to overtime defined under the Fair Labor Standards Act (FLSA). Workers involved in interstate commerce are not eligible. This loophole excludes many Teamsters including workers in airline, railroad, parcel and trucking. 

The exclusion of transportation Teamsters has nothing to do with our membership in a union or coverage by a union contract. 

The Teamsters Union is backing a bill that would close the loophole and make all workers eligible for the overtime tax exemption: the No Tax on Overtime for All Workers Act. 

Teamsters General President Sean M. O’Brien said, "Expanding this policy to cover more Americans and more Teamsters — including those in the trucking, rail, and aviation industries — is common sense.”

More Loopholes

Even for eligible workers, the overtime tax deduction only applies to the portion of overtime pay that is above your normal rate of pay. 

Taxes still must be paid on two-thirds of overtime pay that is paid at time-and-a-half. Taxes have to be paid on 75 percent of overtime earnings that are paid at overtime. 

Teamster Updates

The UPS Package Division issued an update confirming that UPS drivers are ineligible from the tax exemption on overtime earnings. 

The Teamsters Airline Division released a letter confirming that airline workers, including mechanics are also ineligible.